Raising stakes: Relocating to save money can be like getting a raise in salary

Sarah Sloboda and her husband are making about $10,000 less a year than in 2011 and are living larger than ever.

It started back in 2002, when Sloboda, fresh out of studying film at the University of Michigan, moved to New York to follow her dream.

"The inspiration of the people you are surrounded with (in New York) is just incredibly inspiring," Sloboda says. "For the time I was there, it was priceless. I would have paid anything to live there."

But that was a decade ago.

Sloboda reached a point where she says she didn't need to be constantly inspired. "I had a lot of ideas where I needed the time and the quiet and a slower pace to move through and actually do something with," she says. "At that point, all the energy of New York became a hindrance."

She married a lawyer in May 2011 and by July they moved to Cleveland.

As people like Sloboda look at their finances and the current economy, a lot of factors come into play. Sloboda's husband, for instance, just wasn't having luck finding a corporate law gig in New York — partly because of the economy and partly because a lot of people want to work as lawyers in New York.

The financial part of the equation can be huge. It may sound awesome to be offered a six-figure income in, say, San Jose, Calif. — until you plug the figures into an online cost-of-living calculator like the one at bankrate.com or at money.cnn.com. To live at the same level in Austin, Texas, would only require a $60,000 salary — 40 percent less.

Of course, then you are living in Austin, which may or may not be a person's cup of tea.

Calculating relocation

Bryan Sudweeks, an associate teaching professor of finance at BYU, says he has a number of students who have multiple job offers they are considering. "You may have one offer in Richmond (Va.) and one in San Jose, and if you know what those two will pay, you can use a cost-of-living calculator online," he says. "We encourage students to take a look at those calculators and to get a sense for it."

Sudweeks cautions that a lot of these cost of living prices are only the estimated prices. But they are valuable for analysis, he says.

For Sloboda, the analysis included things like the amount of counter space she and her husband could afford. She rented an apartment on a top floor of an old Brooklyn brownstone back in 2007 for about $1,600 a month. She says it should have cost between $3,000 and $4,000 a month. Luckily the landlord, who lived in the brownstone, didn't seem to know this.

That was all for about 1 foot by 3 feet of counter space in a "tiny little kitchen."

It was a one-bedroom place with another room Sloboda used as an office that was the size of a walk-in closet.

The Bankrate cost-of-living calculator gives their move to Cleveland a 43.5 percent lower cost-of-living rating. So making $10,000 less a year was like getting a big raise.

Their new apartment is twice the size and costs $300 less a month in rent. "All brand new appliances," Sloboda says. "Three times the counter space. One and a half bathrooms. A full laundry room. Control over water heater and air temperature."

Her lawyer husband landed his corporate lawyer gig. What makes the move easier is Sloboda has family in Cleveland.

"People underestimate the role family and friends play in life and how enriching they are," she says.

Rose remembers helping one client find a home for his family that included six children.

"Less than a year later, I was helping them sell that home," she says. "The kids could not adjust. It never felt like home to them."

Sudweeks agrees that cost of living is only one factor. "How do you quantify being close to family?" he says. "How do you quantify being close to something you really like doing — such as being close to the mountains or close to the water for waterskiing? There are other non-quantifiable factors as well. It's not a simple decision."

Scott C. Marsh, the owner of Scott Marsh Financial, a registered investment advisory firm based in Salt Lake City, and a professor of personal finance at BYU, says quality of life and cost of living issues can be turned on their heads.

He says his students look at websites like glassdoor.com to find information about salaries, benefits and other cost information about areas and particular companies. They combine it with information about cost-of-living and can often negotiate a better salary.

Marsh also says the website bestplaces.net can tell where the best places are to live — and the worst. He remembers one person who was offered $20,000 a year more in salary, not because the cost of living was higher, but because the city was considered a less than desirable place to work.

Rose says people should be careful not to just focus on the money. One place may pay a lower salary but give a higher quality of life. "You need to ask what is the essence of what you are going for," she says. "Money can fool you. Perhaps what you are really looking for is peace or security."

For Sloboda, the very things that first attracted her to New York became the reasons why she wanted to move.

"A lot of the things I originally moved to New York for I've been priced out on in New York," Sloboda says. "And so have a lot of artists, for that matter. I could get all the things in Cleveland that I could get in New York, and some things I couldn't even get in New York anymore. The opportunities have changed there."

But not everything is cheaper in Cleveland. According to the Bankrate calculator, women's slacks cost, on average, $2.50 more. "I did notice that," Sloboda says. "Why is it more expensive in Cleveland in this little boutique than it is in Bloomingdale's in New York?"